Data is now considered one of the most important commodities. An explosion of consumer data has enabled companies and brands to more easily forge one-to-one relationships by offering tailored experiences and recommendations to end-consumers. Now, these savvy consumers have come to expect this type of personalized interaction from consumer-facing companies.

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The internet, which is one of the most transformative innovations of the modern era, has been the catalyst for this. Consumers leverage connectivity for purposes, such as entertainment, education, knowledge, social sharing and shopping. With respect to shopping, in particular, the internet has put more power in the hands of consumers. Brands no longer control information about their products and services. Instead, informed consumers walk into commerce transactions armed with information about what they want and what they should expect to pay.

This is an important shift in strategy because approximately half of connected consumers globally desire to be distinct from others, according to Euromonitor International’s 2017 Global Consumer Trends Survey. This desire is highest among the youngest cohorts, with nearly 60% of millennials and Gen Z agreeing with this sentiment, showing that this desire will not likely fade anytime soon.

Of course, aspiring next-generation companies and brands cannot accomplish this without help. Technology, such as artificial intelligence, specifically machine learning and natural language processing, will become paramount to delivering these ever-evolving consumer needs. Up to now, companies have been collecting petabytes of data, but have struggled to make sense of it all. Artificial intelligence will enable companies and brands to better synthesize and incorporate mounds of data to create more personalized consumer experiences in the next era of connected commerce.

Artificial intelligence, which refers to technologies capable of performing tasks normally requiring human intelligence, goes back centuries. While artificial intelligence technologies were commercially available by the 1980s, it was not until the turn of this century that the cognitive capabilities that comprise the emerging machine intelligence trend truly took off. Now, the confluence of three powerful drivers – exponential data growth, more sophisticated distributed networks and smarter algorithms - has propelled artificial intelligence to the center of the commerce stage.

Brands like Amazon and Netflix have been leveraging artificial intelligence to better comb through data to offer personalized recommendations. Starbucks is in the process of incorporating more artificial intelligence into its already popular mobile app so it can leverage additional sources of data to enhance product recommendations. Natural language is also behind the chatbot revolution, making personal assistants like Siri and Alexa think and converse more like humans.

Even third-party technology providers have emerged in this space. Dynamic Yield assists the likes of Sephora and Under Armour with building real-time consumer segments using an advanced machine learning engine. Dynamic Yield’s personalized technology leverages machine learning to build customer personas based on billions of data points, including geo-specific events, on-site interactions, purchasing behavior and past communication. Brands might leverage these segments to determine who should and should not be included in a campaign, better match customers to the products they are most likely to use or prevent limited stock from being promoted to shoppers who frequently return items.

Despite this shift toward a data-rich society and more consumers expecting companies to deliver a “story for one”, it is important to remember that not all consumers embrace the methods needed to acquire the data that powers such experiences. Nearly half of global connected consumers view targeted advertisements based on online searches or purchasing history as an invasion of privacy. A similar percentage of respondents say they do not freely share information online, according to Euromonitor International’s 2017 Global Consumer Trends Survey. In addition, the impending privacy regulation in the European Union is creating new challenges for companies that operate in the region as it gives consumers more control over how all this necessary data is collected and used.

Cultivating that “story of one” will be the cost of entry for brands in the future with technologies like artificial intelligence playing a critical role in enabling companies to more easily gather and analyze data that can in turn be used to disseminate these new consumer learnings. As marketers better connect the dots between consumers’ wants and the goods and services they sell, consumers may feel their privacy has been invaded, and in places like the European Union, they will soon have the power to push back. Whether consumers are willing to give up more privacy in exchange for more personalized experiences remains an ongoing conundrum in the corporate world. Tackling this question is only becoming more important given the rising importance of data in the commerce transaction.

As the Global Head of Digital Consumer Research at Euromonitor International, I oversee our digital research to provide actionable insights and in-depth analyses into how technology is fundamentally changing commerce. Recognized as a thought leader in digital commerce, I was...